Midstream Companies Soar as Producers Fight It Out in the Marcellus
and Utica, According to East Daley

New Report Bridges the Gap Between Commodity and Equity Market
Analysis in the Northeast U.S. Natural Gas and Natural Gas Liquids
(NGLs) Region

May 10, 2017 08:00 AM Eastern Daylight Time

CENTENNIAL, Colo.--(BUSINESS WIRE)--East
Daley Capital Advisors, Inc., an energy assets research firm
redefining how markets view risk in exploration and production (E&P) and
midstream energy companies, released a new report: “Righting A Wrong:
The Marcellus/Utica Balanced on a Knife’s Edge.” This two-part report
dissects the interconnection between energy market fundamentals and a
company’s future cash flow.

“This new report shows who wins the biggest piece of the total upside of
$1.9 billion in annualized EBITDA for midstream gatherers and long-haul
pipelines due to expansions coming out of northeast Pennsylvania,” said
Justin Carlson, VP and Managing Director, Research at East Daley
Capital. “What’s unprecedented is the literal transfer of wealth from
producers to midstream companies in the Northeast because of the new
infrastructure builds. Our unique analysis maps this financial ripple
effect from producer to each gathering system to each long-haul
pipeline.”

Part One of the report focuses on production growth centered in northern
Pennsylvania and demand markets directly to the east. Part Two of the
report, to be released in late May, will focus on the Marcellus and
Utica in Eastern Ohio, Southwest Pennsylvania and West Virginia. It will
also explore the impact on pricing and basis as the U.S. natural gas
market is once again transformed.

“There are some companies that are clearly in a much better financial
position than others in the Northeast gas market. Triple digit
production and throughput growth rates will not be uncommon for some
producers and midstream companies in the next couple of years, while
others will barely grow at all,” said Carlson. “This will have serious
cashflow implications for many operators in the region. In the Marcellus
and Utica, a single market event can impact every party along the value
chain from producer, to gatherer, to processor to long-haul pipeline.
It’s a very dynamic time right now in that region.”

Key findings from Righting A Wrong - Part One include:

Expansions out of northeast Pennsylvania (NE PA) will result in $1.9
billion in EBITDA split almost evenly between midstream gathering and
long-haul transportation.

Higher-risk long-haul transport projects account for $182 million in
transportation EBITDA but $254 million in midstream gathering EBITDA.

Productive capacity for producers in NE PA is limited to 14.2 Bcf/d,
5.2 Bcf/d higher than current production levels.

Cabot, Chief, Seneca and Shell will all see over 100% increases in
production growth.

Williams Partners (WPZ) will realize an upside of $658 million from NE
PA, driven by production linked through their gathering systems to new
long-haul expansions.

ETP’s NE PA gathering system will almost double from 16% to 28% of
midstream segment EBITDA.

East Daley Capital is an energy assets research firm that is redefining
how markets view risk for midstream energy companies. In addition to
using top-level financial data to predict a company’s performance, East
Daley delivers asset-level analysis that provides comprehensive,
fact-based intelligence. Supported by a team of unbiased, experienced
research analysts, East Daley provides its clients unparalleled insight
into how midstream companies operate and generate cash flow. East Daley
uses publicly available fundamental data and intersects that data with a
company’s reported financials to break midstream companies down to
asset-level cash flows. The result allows for more informed portfolio
decisions. Founded in 2014, the company is based in Centennial,
Colorado. For more information visit http://www.eastdaley.com.